Philip Morris faces allegation over health union donations

Royce Millar, Ben Schneiders

The federal government's royal commission on union slush funds is examining allegations that tobacco group Philip Morris helped bankroll a successful campaign backed by union whistleblower Kathy Jackson and federal Labor MP David Feeney, in elections for the disgraced Health Services Union.

It is known the commission is considering the explosive claim, which has been confirmed by Marco Bolano, head of the Feeney/Jackson 2009 ticket. Tobacco funding of the 2009 HSU No.1 branch elections in Victoria was believed to be in the tens of thousands of dollars.

While the alleged donation was ostensibly for a union election, the HSU has long been viewed as a political vehicle by Labor sub-factions, and as a factional base in the ALP for Mr Feeney, a current opposition frontbencher and right faction boss.

Mr Feeney has strenuously denied any knowledge of contributions by Philip Morris to the HSU campaign, saying: ''I have not solicited donations from Philip Morris for any purpose since 2004.''

Philip Morris also denied contributing to an HSU election campaign.

''Philip Morris Limited has strict internal approval processes for political contributions, and all political contributions are recorded and disclosed in accordance with applicable laws,'' a spokeswoman said. ''These records show that no such donation was made.''

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The allegation of a Philip Morris donation raises troubling questions for the Labor Party, which has had an official policy against tobacco donations since 2004.

One well-placed labour movement source, aware of the alleged Philip Morris donation, has described it as a ''back-door'' contribution to the ALP.

Mr Feeney has links to Philip Morris dating back to his time as an ALP state secretary from 1999 to 2002, when the company made donations to Victorian Labor, including $5000 in 1999, $6600 in 2000, and $5000 in 2001.

Securing funds is a big role for the party secretary.

On Friday, Mr Feeney acknowledged continuing dealings with the tobacco industry through his work in various parliamentary roles.

In 2009, he was a backbencher in the Rudd government. He came to prominence the following year as a vital player in the removal of Kevin Rudd as prime minister.

Ms Jackson has played a leading role in exposing corruption within the disgraced HSU.

However, she has come under scrutiny over her own activities, both as a union leader and in the factional battles over the HSU.

Last month, it was revealed that as head of HSU No.3 branch, Ms Jackson ran a secretive union slush fund that used members' money to help support the political and factional campaigns of her allies, including those contesting elections in other unions. She did not return calls from Fairfax Media over the past two days.

The 2009 election was a three-way stoush between warring right-wing groupings including those led by Mr Feeney and Labor Party leader Bill Shorten.

The leadership candidates included little-known former activists and officials, including the ultimately victorious Mr Bolano for the Jackson/Feeney group, and former organiser and former Darebin mayor Diana Asmar, backed by Mr Shorten.

''A number of years after the 2009 HSU election, I became consciously aware that Philip Morris had donated money to my 2009 campaign,'' Mr Bolano said. ''I have advised the royal commission of this and therefore it would be inappropriate to comment further.''

So flush was the Jackson/Bolano ticket with money and resources that one campaign team member later said in 2011 that the election was ''unlosable'' for the Feeney/Jackson/Bolano team.

''The thing that troubled me was the sheer weight of support that came in from the background for the campaign. There was a shitload of money coming in and there was no discussion about it,'' one of the Jackson/Feeney/Bolano team told Fairfax Media in 2011.

Sources from all three camps in the 2009 election put the campaign's cost at more than $1 million.

The Philip Morris claim is the latest in a long list of scandals surrounding a union that represents some of the lowest-paid health industry workers, including abuse of credit cards to pay for prostitutes, lavish lifestyles and entertaining, diversion of money for party political campaign, alleged secret commissions and kickbacks and nepotism.